Importance of Transparency to Build Consumer Trust

23 August 2021

Here’s a little scenario for how digitized in-store retail in the not-too-distant future might look.

A customer walks into a store. A cutting-edge scanning system automatically identifies them from their smartphone, alerting a member of staff and pulling up their full history from the CRM in real time.

A clerk walks up clutching a tablet, smiling warmly and greeting the customer by name. The clerk initiates a polite and friendly conversation, asking the customer about their family and work and what they can help them with today.

As the conversation develops, an AI on the tablet listens out for cues from what the customer is saying, mixing in data from their purchase history (online and in store, including recent visits to websites run by rival brands) to make recommendations to the clerk and prompt them on how to skillfully navigate the interaction towards a sale.

Let’s stop there and ask a question. How do you see this scenario developing? Do you expect to see the customer leaving the store 10-15 minutes later, laden with bags having spent way more than they were planning on, glowing from the amazing, personalized experience they’ve just received?

Or do you think there’s a danger that all of this might be a little too much for the independently minded modern consumer, a little creepy, even – like they feel they’re being somehow digitally spied on by a business that is using its sophisticated IT assets to read and interpret their every move?

The problem is, businesses often imagine a future that ends with the first scenario – the perfect digitally-enhanced personal shopping journey. But from what consumers tell us, overreaching how personal data is used is more likely to see them react like the latter.

Making data use transparent

Modern business IT – your POS, your website, mobile apps, social media – hands organizations huge volumes of data about their customers. We don’t even need the smartphone scanners and eavesdropping AIs to interrogate consumer behavior at a very sophisticated level. We can already analyze consumer data and use it to predict purchasing behaviors with remarkable precision.

The danger is, customers themselves are catching on to it, and in many cases don’t like it. And if they’re not on board, they turn tail and walk out the store. To put it bluntly, no one wants to feel they’re getting their private lives snooped on for the sake of someone making a quick buck. This push back against what was previously more or less an open market in data collection and use has found its way onto the statute books, with examples like the California Consumer Privacy Act (CCPA).

It’s not that consumers are, on the whole, against the idea of data about them being used by businesses outright. A lot of the time they recognize it has benefits to them, too. But what they don’t like is data being used without their knowledge. This is where the question of transparency and trust comes into play.

One survey by Accenture found that 83% of consumers are willing to share their data to enable a personalized experience. But the condition is that they want brands to be upfront and open about what they are doing. In the same survey, a quarter (27%) of respondents said they’d come across a brand experience that they found invasive or ‘creepy’, and two-thirds (64%) of these people said it was because the brand knew things about them that they had never knowingly shared.

Going back to our example at the start of this article, two in five participants in the same survey said they found it ‘creepy’ when they got texts or mobile notifications the moment they walked into a store. We can surmise what the reaction would be if a clerk walked up to them, greeted them by name and started asking if everything was ok with the goods they bought last time out.

Transparency locks in loyalty

Perhaps the overall moral of the story is that consumers are no longer prepared to tolerate the feeling that they are somehow being duped into buying something. Data and digitization has empowered brands, but it has empowered consumers even more. Through their smartphones, through the internet, through social media and user reviews, they have the knowledge at their fingertips to compare products, prices and quality of service, and make their purchasing decisions accordingly.

Any sense of brands trying to play the snake oil salesman and they are off elsewhere.

Transparency and trust around the use of customer data is a topical issue right now, but it’s far from the be all and end all of where brands should focus their attention on being open and trustworthy in order to lock in consumer loyalty. Transparency in pricing, transparency in where and how products are sourced, transparency in environmental and ethical commitments – this stuff all counts.

And if you still have any lingering doubts about the relevance of it all, check out these figures from a survey carried out by CPG consultancy Label Insight – 78% of customers say they consider brand transparency to be very important in their purchasing decisions, while 73% are prepared to spend more on products that offer complete transparency. To top it all off, 94% say they are more likely to remain loyal to a brand that is open and transparent. So don’t get too carried away with those futuristic personalized experiences just yet. Focus on getting full consent and buy-in from your customers on how you use their data first.